Correlation Between Graphene Manufacturing and 5E Advanced
Can any of the company-specific risk be diversified away by investing in both Graphene Manufacturing and 5E Advanced at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Graphene Manufacturing and 5E Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphene Manufacturing Group and 5E Advanced Materials, you can compare the effects of market volatilities on Graphene Manufacturing and 5E Advanced and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Graphene Manufacturing with a short position of 5E Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphene Manufacturing and 5E Advanced.
Diversification Opportunities for Graphene Manufacturing and 5E Advanced
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Graphene and FEAM is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Manufacturing Group and 5E Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 5E Advanced Materials and Graphene Manufacturing is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Graphene Manufacturing Group are associated (or correlated) with 5E Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 5E Advanced Materials has no effect on the direction of Graphene Manufacturing i.e., Graphene Manufacturing and 5E Advanced go up and down completely randomly.
Pair Corralation between Graphene Manufacturing and 5E Advanced
Assuming the 90 days horizon Graphene Manufacturing Group is expected to generate 0.89 times more return on investment than 5E Advanced. However, Graphene Manufacturing Group is 1.12 times less risky than 5E Advanced. It trades about -0.04 of its potential returns per unit of risk. 5E Advanced Materials is currently generating about -0.05 per unit of risk. If you would invest 111.00 in Graphene Manufacturing Group on September 2, 2024 and sell it today you would lose (69.00) from holding Graphene Manufacturing Group or give up 62.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphene Manufacturing Group vs. 5E Advanced Materials
Performance |
| Timeline |
| Graphene Manufacturing |
| 5E Advanced Materials |
Graphene Manufacturing and 5E Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphene Manufacturing and 5E Advanced
The main advantage of trading using opposite Graphene Manufacturing and 5E Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphene Manufacturing position performs unexpectedly, 5E Advanced can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 5E Advanced will offset losses from the drop in 5E Advanced's long position.| Graphene Manufacturing vs. Iofina plc | Graphene Manufacturing vs. Nano One Materials | Graphene Manufacturing vs. Gevo Inc | Graphene Manufacturing vs. Haydale Graphene Industries |
| 5E Advanced vs. Kronos Worldwide | 5E Advanced vs. Sensient Technologies | 5E Advanced vs. Element Solutions | 5E Advanced vs. Trinseo SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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